If you pay any attention at all to the fintech world, and increasingly social media as a whole, you know cryptocurrency is a hot topic. It’s likely that your neighbor or your kids are following some kind of coin. In the latest crypto headlines, Tesla CEO Elon Musk tweeted last week that the electric vehicle maker would suspend car purchases using bitcoin, citing environmental concerns. And while that sent bitcoin plunging, the self-professed “Dogefather” didn’t write off the use of crypto entirely – just that it needs to transition to more sustainable energy.
More and more merchants are entering the conversation by accepting crypto payments from consumers. Retailers like Amazon, Delta, and Microsoft are adding it to their checkouts – indeed any shop on Shopify’s platform can accept cryptocurrency. Let’s take a look at why it might make sense for your shop to accept crypto too.
Crypto is cool. Like really cool. The hype cycle is in full force and it doesn’t look to be slowing down anytime soon. It’s a way to show even non-crypto fans that you are aware of how the world is changing and there is a strong halo effect. This alone can drive sales.
Wallet holders who want to cash out some of their Dogecoin bounty may want to do so through the easier way of spending it directly from their wallets. Acceptance has led some merchants to report incremental sales. Forrester Consulting conducted an independent study and among the merchants they interviewed, adding Bitpay to their website increased their expected first-time customers by 40%, and average AOV for purchases made with cryptocurrencies doubled.
The advantages of the blockchain also apply to these transactions. They are secure, available nearly worldwide, and immutable – that means no chargebacks!
What isn’t getting much attention is that there are ways to accept crypto that do not involve actually handling actual cryptocurrency, and can be less expensive than a credit card transaction.
Most merchants that accept coins receive their settlement in fiat currency (like euros or US dollars) via a cryptocurrency payment service provider like Bitpay. This gives you the advantages of accepting crypto without concerns of volatility or the potential tax implications of holding the currency.
Access to a cryptocurrency payment service provider may be available via a current processor, so merchants could receive this settlement along with their other cards or local payment methods. This makes it easy to implement and integrate to your current reconciliation processes.
Other businesses have decided that accepting crypto directly allows them to get the currency and keep it as an asset. This has its appeal as well. Depending upon the coins you accept and the maturation of the market, you could find yourself with an investment that could generate significant income. That being said, there are still evolving areas related to cryptocurrency oversight, from the US’s Eliminate Barriers to Innovation Act, passed by the US House at press time or the EU’s proposed Markets in Crypto-Assets (MiCA) regulation. Upcoming legislation and government attention to cryptocurrency could make holding these more – or less – attractive to your company.
Ultimately, adding cryptocurrency to your payment method mix can drive sales and give your consumers greater choice in how they pay. From the perspective of someone in Fintech, it definitely ticks some big boxes of the goals of the industry.
While there are definitely people with a buy-and-hold strategy in crypto, there is a strong segment looking to spend their coins and shopping is becoming a more popular choice as more retailers are expanding its acceptance.
For your business, there are options in how to accept coins with the level of risk you are comfortable with – including zero. From the more established Bitcoin and Etherium to the wild ride of Dogecoin – since Bitpay started accepting it in March, DOGE transactions have skyrocketed to the 4th most used crypto in their rankings – cryptocurrency will be something to watch for some time. As it moves into the mainstream, it provides an opportunity to engage more consumers to your brand.
If you’re curious if crypto should be in your payments offering, you can contact one of our experts here.